With thousands of sellers added daily, it’s vital to optimize Amazon PPC campaigns to stand out from the competition.
Here, you’ll find:
- How Amazon pay-per-click (PPC) campaigns work
- The difference between Amazon PPC advertising and Google Ads
- How to crack Amazon’s algorithm
- Best strategies to optimize your Amazon PPC campaigns
If you have an Amazon business, you’re one of many — the digital marketplace giant has over 150,000 B2B sellers and 1.9 million selling partners.
People flock to Amazon for quick shipping, affordable prices, and expansive inventory.
As a business, it’s a great place to build brand awareness, since your campaigns will help you access tons of potential customers.
And while folks often think of Google Ads first when it comes to pay-per-click (PPC) advertising, Amazon Advertising can be just as profitable and far-reaching with the right optimization strategy.
Still, what does Amazon PPC mean for your product listings, and how do you make the most of them? If you want one-on-one help with that, our PPC experts are happy to support you and pump up your ROI by 4.5X.
Do you prefer to DIY your campaigns? We’ve got you covered there, too. Keep reading as we walk you through the ins and outs of Amazon PPC and how to optimize every ad for success.
But first…
What is Amazon PPC optimization?
Amazon PPC optimization is the process of tweaking and improving your Amazon ad campaigns for better results.
And by results, we mean driving more quality traffic, sales, customers, revenue, and brand awareness. A few strategically placed keywords, high-res photos, and regular progress checks can work together and translate into serious business success on Amazon.
But before you can optimize your campaigns, you should learn what they entail.
Amazon PPC campaigns: How do they work?
Amazon campaigns function similarly to Google Ads. You pay Amazon every time someone clicks on your ad. The main difference? Your ads primarily show up on Amazon’s product pages and search engine results pages, not Google’s.
Amazon sponsored products will help you generate ads based on your existing product listings. You can target relevant keywords and add negative keywords just like you would on Google, bid per click, and review analytics, too.
Amazon boasts a 93X increase in sales for sellers who use Amazon Advertising. Additionally, Amazon Ads offer a 54% increase in views, which will supercharge your brand awareness.
So, what does an Amazon ad look like? Chances are, you’ve seen plenty of them every time you search for products on Amazon. Let’s say you’re browsing for specific electronics; you’ll see ad listings at various places on the search results page.
You can pick from a few different Amazon ad types:
1. Sponsored product ads
The first products someone sees after typing in a search query in the Amazon search box are sponsored product ads. The Amazon search engine results page (SERP)` will show sponsored product ads from a variety of sellers:
Source: Amazon
2. Sponsored brands
These come up even higher than sponsored products, directly below the search bar in Amazon’s SERP. However, you’ll need to sign up on Amazon’s brand registry to score this A-level PPC exposure. You might see sponsored brand posts either high, low, or to the left on Amazon’s SERP.
Source: Amazon
Melissa Torre, SEM Lead Strategist at HawkSEM, points out the value in registering your brand, specifically for new sellers:
“Brand Registry allows a new seller to announce themselves and their products with image headline ads and video ads. These are a great way to get the customer familiar with the brand, which generally helps in the decision-making process — and to demonstrate authority in this space.”
How does this authority help brands succeed on Amazon?
Torre adds that it “unlocks the A+ content descriptions that add to the user experience, scroll depth, and conversion rate that the A10 Algorithm loves and will reward it with higher rankings.”
3. Sponsored display ads
Amazon PPC ads that appear on or off Amazon’s website are display ads. You might see them on:
- Customer review pages
- Merchandising emails
- Related listing pages
- Demand-side platform
- “Add to cart” sections
- Banners displayed in your inbox
The key here is that your audience has already signaled interest in a product similar to yours. You’ll need to be a part of Amazon’s brand registry to use display ads as well.
Source: Amazon
5 tips for Amazon PPC optimization
Ready to learn exactly how to ensure your ads show up at the top of results? Here, we’ll walk you through every step of optimizing your Amazon PPC ads, from knowing your audience to finding the right keywords to setting clear goals and building trust with positive reviews.
Let’s get started.
1. Use clickthrough rate to assess ad quality
Clickthrough rate (CTR) compares your ad’s number of clicks to the number of times a viewer sees your ad (impression). So if one ad receives 20 clicks and 20 impressions, your clickthrough rate would be 100%. Similarly, if one ad receives ten clicks and 100 impressions, your clickthrough rate would be 10%, which is closer to the norm of 2%-5%.
Now, let’s say you have a solid clickthrough rate of 5-10%. The only problem? You don’t have the sales to match. That means people are interested in buying your product — interested enough to click your Amazon ad — but your listing doesn’t have a high conversion rate.
Don’t worry, you’re not the only one. This is a common issue we see in our clients’ Amazon PPC campaigns. We notice it immediately with our proprietary tech, ConversionIQ. Then, we combine that information with other comprehensive campaign data to create insights and solutions.
Bottom line? Amazon PPC can only set up the shot. Your ad needs to do the rest of the work to dunk the ball. So if you’re getting clicks without conversions, here’s what you can do:
Show value through better branding and customer stats
The Harvard Business Review cited a management study on buyer behaviors and found two impressive motivators driving customers to buy a product. Word-of-mouth is one, so your review section is essential (more on that later).
But peer observation — watching other people use your products — was even more motivating. The goal is to make your brand more identifiable and trustworthy. Do that by:
- Improving your branding: This helps your products look more noticeable and distinct. You might make your logos more identifiable on your packaging, or find more opportunities to publicize brand materials.
- Listing reviews and customer stats on your website and listing: Offer figures about how many people are using your product and what problems it solves.
Prioritize the convenience of your products
Convenience is a top reason people use Amazon. Let’s say your product takes three weeks to ship or costs more than your competitors without a clear reason. Those factors can diminish the convenience of your products, resulting in lower sales and conversions. Shipping and pricing are two crucial convenience factors for customers, so an interest without conversion could stem from a lack of convenience or access to your products.
What’s next on your Amazon PPC optimization checklist?
2. Target the right audiences with keyword research and optimization
Let’s talk about sponsored display and product ads. The target audiences viewing your sponsored display ads are already considering similar products for purchase — maybe your competitors.’ You might think, “great, they’re already primed to buy, so my work here is done.”
Not quite.
You still need to study your target audience and their buying behaviors.
But most importantly? Your keywords need to be on point so that your ad targets those audiences in the first place.
But isn’t keyword research painstaking? Not if you know what you’re doing. But hey, it doesn’t hurt to have some help.
We rounded up the best SEM optimization tools for keyword research, and Optmyzr was one of the few that covered Amazon. Of course, ConversionIQ takes care of keyword research for any platform in a flash.
For example, our clients Microsoft and Columbia University used our ConversionIQ software to pinpoint low-volume, low competition, high-converting long-tail keywords. The result? Massive revenue gains!
Still, this is your audience we’re talking about. Put yourself in their shoes and type in a few queries on the search bar to see what comes up.
Another great resource is Amazon’s Search Term Report. You can download this in the “Reports” section of your Amazon Seller Central account. The goal is to see which search queries resulted in clicks. On top of that, the report shows useful metrics for each query, like CTR, product sales, and order numbers.
Now, what about Amazon’s automated keyword suggestions?
“Only running on keywords that Amazon suggests isn’t a great idea,” explains Torre. “I will usually see what Amazon is offering, note the ones that I would like to test, and set up a separate campaign or ad group to test those terms. They are very likely high-volume search terms but are also very high competition terms, which will cause those terms to be more expensive.”
3. Keep an eye on average cost of sale (ACOS)
PPC can blow through your entire ad budget if you’re not careful. That rings true for both Google Ads and Amazon Ads.
That’s why it’s vital to monitor your ACOS. Let’s say you pump $500 each week into an ad campaign, and it generates $1,000. Your ACOS would be 50%. ACOS compares your ad spend with ad revenue. If it’s too high, your profit margin is slim.
Now, a 50% return might not seem so bad. But you’re only looking at the cost of your Amazon PPC campaign here. You’re not counting your labor and materials, which can quickly diminish your profit margin.
“I always say a well-running account that is utilizing all its resources, promoting its brand, prospecting appropriately, and optimizing constantly (for products between $30 and $150) should be running somewhere around a 20% target ACOS/5.0 ROAS,” says Torre.
“It’s very likely you’re not acquiring new audiences and are mostly running on branded terms or some form of the brand, such as a model number or product collection name, that is specific to the brand. Obviously, a branded-only campaign will bring in a much lower ACOS overall, but that is just one part of the funnel and focusing only on those [branded] terms will not grow the bottom line.”
So, how else can you improve your ACOS?
“It’s important to evaluate the entire account sales on products running ads, and not just the ads themselves. Showing up often on a page (both organically and paid), increases a seller’s ability to demonstrate authority in the space and the likelihood of a click. So it is likely that you will find a 20% ACOS is really only a 10% ACOS overall.”
Next step? Start investigating. A/B testing is valuable here as well, as you can test different campaign settings and try new keywords to determine which combinations garner better ROI.
Another way to reduce your ad spend is through strategic ad groups. You might limit specific keywords for each group to better target different audiences and avoid wasted clicks.
4. Solidify clear Amazon PPC strategy goals
What are you looking to accomplish with your Amazon PPC campaign? Do you want:
- Sales?
- Higher order value?
- Sales for old stock?
- Brand awareness?
- New customer base?
- Better SEO and organic rankings?
- Repeat customers?
It’s easy to lean on “more sales and revenue,” which we totally get. But if you dive a bit deeper into your goals, you’ll fine-tune your campaign structure, budget, and keyword bids.
For example, let’s say you want a new customer base. You might expand your keyword match types to include phrase match and broad match to reach more people. Or, you might have your eye on a specific new audience demographic, in which case you might hyper-target them with very specific keywords and exact match.
Still, your organic strategy should take center stage if you want to reach a new audience. While Amazon’s A10 Algorithm rewards strong PPC campaigns with rankings, Melissa doesn’t recommend PPC before an organic strategy:
“I tell every client that before we run PPC, we will always have to ensure the listing is fully optimized. That includes backend keywords, keyword-heavy bullet points, and headlines, and at least 5 high-quality images. If possible, adding A+ descriptions are imperative. A new seller will likely not rank immediately out of the gate, but having the listings optimized for that algorithm will help move the needle slowly.”
Bottom line? Torre suggests building out the organic strategy before implementing PPC. Otherwise, you risk compromising the PPC campaign’s success if the organic portion of the listing doesn’t match the search terms or the searcher’s intent.
Evaluate your goals
You should also consider your goals for scaling and consider how you’ll keep up with competitor bids if you’re a small business.
“There are a few ways to position a new small business to be successful in an inundated product market: utilize a keyword research tool, use little tools that can help get the click, and get Brand Registered,” says Torre.
“The keyword research tool will allow you to find strong keywords that may not have as much competition. For example, a small seller may want to run on the term ‘painters tape’ and go up against the big names in that category with endless money to drop on ads.”
The solution?
Torre recommends searching for lower competition terms, such as “1 blue painters tape.” This is a higher quality keyword that has fewer competitors, giving new sellers a better chance at ranking on the first page for that term.
What if you want to get more return customers to build customer loyalty? Implement discounts in your remarketing sponsored display ads. See these examples in the “picnic basket” product category below? Look at the limited-time deal and reduced prices:
Source: Amazon
Offer incentives
Torre sees discounts as a strong strategy for newer businesses:
“Tools like a strong main image and a coupon or discount flag are great ways to organically stand out from the competition. Even a little 5% discount flag can be eye-catching and lead to a quick click.”
We asked Torre for any last-minute strategy tips for startups and businesses in competitive industries. Her advice?
“I would steer clear of category campaigns in the beginning. These do not tend to convert well but can be a good way to run top-of-funnel ads set to serve your product on complimentary products. For example, if you sell sheets, running a bed category ad could seem tempting, but it will be unlikely to be fruitful as people are searching for something else at the time.”
Torre cautions against jumping at the “lightning deal” approach right away, especially if you’re a new brand.
“Previously this [lightning deal] was a strong way to announce your new product line or a new brand, but these days it seems to just eat into the margins and I have not seen sustained growth because of a lightning deal,” she says, adding to instead “let your competition run those deals and piggyback on those efforts with your own ads and a small discount flag. If a customer is that price conscious…they are unlikely to become a loyal customer at a regular price.”
5. Polish ads with positive reviews
Some experts recommend you wait for a few positive reviews before paying for Amazon advertising.
This is because reviews build social proof that influences your audience to buy from you. Reviews build trust and assure new customers that they’re making a solid purchase, especially during tough economic times.
Check out this hilarious example of a leggings review gone viral. A woman shared a picture of herself sliding down a rocky hill, which showcased the product’s durability in action: product testing at its finest!
Source: FilterFreeParents (Amazon)
But one great review might not be enough to make Amazon PPC campaigns worth the cost.
Try to secure 5-10 reviews for a new product before investing in a campaign. And if you hear crickets? Well, no reviews aren’t as bad as bad reviews, but they don’t help you much. Incentivize your audience to provide detailed reviews with a free gift or product discount.
You should pay attention to reviews while your Amazon PPC campaign is running, not just as a precursory step.
Amazon PPC campaigns vs. Google Ads campaigns
Ever skip over a Google PPC ad on the SERPs? You might want the organic results first — but Amazon PPC blends seamlessly with organic on its smooth interface. The PPC aspect functions the same as Google’s: web searchers click your sponsored ad, and you’re charged per click.
Another great edge that Amazon PPC has over Google is the stage in the buyer’s journey. People browse Google every day for general info, requiring a lot of coaxing for them to make a purchase.
But when your ad appears in front of an Amazon audience? Those potential customers are more primed to buy if they’re already browsing the online marketplace.
You can also leverage Amazon’s FBA program, where Amazon takes care of the packaging and shipping to your customers. It’ll cost you, but half of Amazon’s sellers find it useful enough to warrant the investment.
Still, Google is king, right?
The search engine powerhouse has more user data than Amazon.
That’s why Google Ads campaigns offer more strategic targeting based on hobbies, income, gender, location, age, and more. These allow you to focus on relevant demographics and cut out misaligned searchers.
Unfortunately, Amazon doesn’t offer that same advantage. However, you can get granular with keyword strategies and access off-Amazon audiences through the Demand-side platform (DSP), which places ads on other Amazon-owned sites.
The takeaway
When done correctly, Amazon PPC optimization translates to lower ad spend and higher revenue. Amazon shares tons of inspiring data about its partners, including 225,000 sellers who hit $100,000 in sales in 2019, and 15,000 who hit $1,000,000!
That could be you with the right support. While Amazon PPC campaigns offer a more streamlined, automated process than Google, they can still tank your organic rankings if done haphazardly.
Apply the Amazon PPC tips in this guide, but save yourself more time by calling for backup. Our PPC experts know how to optimize Amazon PPC for best results — plus, they’re armed with laser-sharp insights, automation, and data from our ConversionIQ software.
Ready to level up your Amazon PPC optimization? Let’s talk.
